International Corporate Social Responsibility and Stakeholder Governance
Song, M., Jo, H.
Type of Research
Peer-Reviewed Paper Presentations
2013, Before July
Discipline-based scholarship (basic research)
Both corporate governance (CG) and corporate social responsibility (CSR) are getting increasing attention from academics and practitioners alike. In this paper, we examine the empirical association between international CSR and stakeholder governance around the world. We examine two categories of governance devices: board governance and stakeholder governance around the world to determine the relative importance between the two in firms’ engagement of CSR activities. To examine this relation properly, we not only employ a large and extensive sample of international firms, but also control for endogeneity as well as serial autocorrelation of CSR scores by using dynamic panel generalized method of moments (GMM) that are known to cure both endogeneity and autocorrelation problems reasonably well. Our results suggest that stakeholder governance positively influences firms’ CSR engagement with a greater magnitude than board governance after controlling for endogeneity and other confounding factors of traditional CG mechanisms, firm characteristics and national factors. Stakeholders’ influence in CSR engagement is more prevalent when investor protections are weak and information environments are more opaque.